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Windhoek Country Club’s consistent dividends a rarity in state-owned enterprises

2018-10-25  Edgar Brandt

Windhoek Country Club’s consistent dividends a rarity in state-owned enterprises

WINDHOEK – The Windhoek Country Club Resort and Casino (WCCR) yesterday handed over a dividend cheque of N$6 million to government for the 2017/18 financial year, representing between 15 percent to 20 percent of EBITA (earnings before interest, taxes and amortisation). According to WCCR Chairman, Sven Thieme, the dividends were made possible by the resort’s healthy cash flow position as well as the absence of any loans taken out by the establishment. The dividend cheque was handed over to Pohamba Shifeta, Minister of Environment and Tourism while Leon Jooste, Minister of Public Enterprises, was also in attendance.  

At the dividend handover, Jooste jested that he had to look up the definition of ‘dividends’, in a remark aimed at non-performing commercial state-owned enterprises that rarely or never pay over dividends to government. Jooste added that the WCCR’s consistent payments of dividends was due to the entity’s quality of leadership and its firm grip on corporate governance. 

Shifeta echoed Jooste’s sentiments, saying that the aim of commercial SOEs was to make money and not to rely on government for bailouts. “With both commercial and non-commercial SOEs the directors and top management often feel that they cannot be held personally liable for the company’s performance. It is high time we enforce the Companies Act to hold company leaders fully responsible for financial performance. We seem to be afraid to charge or reprimand these people,” said Shifeta. 

“As we all know the economy has been facing tough times for the past two years and this also has an impact on certain aspects of our business. Tourism, however, remains robust and in 2017 we were able to maintain the high performance and good results attained in the previous year,” said Thieme.  

He added that he was delighted with the results achieved at the Windhoek Country Club Resort and Casino. “Once again, the team at WCCR can stand proud and I, for one, am excited about the achievements. Highlights of the past year include the completion of the hotel refurbishment, the output of our own solar energy plant - saving money and electricity – and the many happy guests and conference attendees who frequented our hotel. It is worth mentioning that the refurbishments were fully paid out of the WCCR’s own cash reserves and that, by itself, is a great accomplishment. We are grateful and excited to be able to pay dividends to government, thereby proving once again that the WCCR is a success story.” 

Thieme has been hailed as an integral part of the WCCR’s turnaround process and the usually humble executive was extremely proud of what he and his team have been able to accomplish.  “The WCCR was basically bankrupt. But, together with government, we did a great job in turning this establishment around,” he said.  

It is estimated that before recent renovations the WCCR held a cash flow reserve of about N$70 million. Even after the dividends paid and extensive renovations, the resort still holds about N$20 million in cash reserves. A significant aspect of the turnaround is that the WCCR has increased its asset base from about N$74 million in 2009 to close to N$330 million today. 

Tony Boucher, General Manager of the WCCR, added: “2017-18 proved to be a challenging financial year and the core focus areas of the business in the past year were to maintain cost containment measures and to implement new, innovative ways of generating additional income streams. The hotel successfully improved occupancy, average rate, turnover and profitability despite the inclement economic conditions.  Casino operations remain a focal point for the foreseeable future as a result of the ever-increasing pressure on the consumer’s disposable income levels.”

2018-10-25  Edgar Brandt

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